Lawyers wrap case in Detroit bankruptcy trial

DETROIT (AP) - Attorneys have ended final arguments in a rare trial to determine whether Detroit can become the largest municipality to fix its finances in bankruptcy court.

The daylong remarks Friday for and against a Chapter 9 reorganization now will be sorted out by Judge Steven Rhodes. He could take days to make the decision.

Attorneys representing Michigan Governor Rick Snyder and Detroit's emergency manager argue that the July filing came after careful, deliberate planning. They say it was a last resort after all options had been exhausted.

But retirees, unions and pension funds say Snyder and emergency manager Kevyn Orr had their sights on bankruptcy for months and didn't engage in good-faith negotiations. That's a key step in a government bankruptcy.

“Excuse me one second,” the judge said. “What would you say to that retiree now?”

“I would say his rights are in bankruptcy now,” Orr told the judge. “I would say his rights are subject to the supremacy clause of the U.S. Constitution.”

“That’s a bit different than sacrosanct, isn’t it?” Rhodes replied.

Orr continued to deny allegations that there was no attempt to negotiate with creditors "in good faith" prior to the city's bankruptcy filing. It's a pivotal point lawyers for the city's creditors are trying to prove. If they can do it, the city might not be eligible to reorganize under the protection of federal bankruptcy laws.

Orr ended his testimony this morning around 11 a.m.

Next to the witness stand, Snyder aide Richard Baird and former state treasurer Andy Dillon.

Former state Treasurer Andy Dillon finished his testimonial in Detroit’s bankruptcy trial, bringing his three-day testimonial to a close.

On Tuesday, Dillon defended his recommendation for Detroit’s bankruptcy filing, saying it was a “last-resort option.” But some of Detroit's creditors are arguing that the decision to file for Chapter 9 bankruptcy was not exactly a last resort, but instead a quick decision that overlooked an opportunity to continue negotiations.

Well, it was quite a week for our state’s largest city. Voters elected a white mayor for the first time since 1969.

Had you gone to Lloyds of London 10 years ago and bet that within a decade, America would have a black president and Detroit a white mayor, today you would be very rich indeed.

But in the city Cadillac founded, attorneys today will offer closing arguments in a trial to determine whether the city will be allowed to file for bankruptcy. While everything in Federal Judge Steven Rhodes’ courtroom is by the book, there is an element of Kabuki-theater unreality about it all.

Nobody really believes the application will be denied. If it were, creditors would tear what remains of Detroit apart with the efficiency of a pack of wolves with a lamb.